Investors want AI-powered advisors, and fintech firms race to meet demand

Financial Advisors


Investors are bullish on artificial intelligence-powered financial advisors, and fintech firms are racing to meet the demand.

A recent Morgan Stanley Wealth Management survey found that three-quarters of investors believe AI can help advisers better serve clients. Of the 924 investors surveyed, 63% said they would be interested in working with advisors leveraging this technology, with investors between the ages of 35 and 44 showing the most enthusiasm.

But the survey also found that 82% of investors don’t believe AI will fully replace advisors, and 88% agree that human relationships still matter. .

“Although AI is clearly a game changer and we have only scratched the surface of AI’s potential impact in financial services, this data is consistent with insights we have known for some time. In short, the clients most engaged with their financial advisors are also the most engaged clients,” said Jeff McMillan, head of analytics, data and innovation at Morgan Stanley Wealth Management in a statement. Stated. “In this context, AI should not be viewed as a replacement for human guidance, but as a powerful tool to enhance financial advisors’ ability to manage their operations and interact with clients.”

Morgan Stanley is one of several companies already in the market with AI applications for advisors. The company is an early partner of his OpenAI, using GPT-4 technology to create an internal chatbot that advisors can use to query Morgan Stanley’s library of proprietary content.

Morningstar joined Morningstar with Mo, a generative text AI that debuted at the company’s annual conference in April and went live this week. Mo will be available to Advisors at no additional cost across Morningstar’s flagship products, including Advisor His workstations.

Built using Morningstar’s investment research library and Microsoft’s Azure OpenAI service, advisors can use Mo to surface and summarize insights and analysis conversationally. James Rhodes, Morningstar’s CTO and president of data, research, and enterprise solutions, said that when a client asks a question about a particular investment, advisors refer it to Mo and Morningstar’s He said he could get answers based on research and editorial content.

Morningstar also envisions Mo helping advisors use its products. For example, instead of thinking about what kind of suggestions a particular account needs, advisors can type in, “I want you to do the suggestions for me,” Rose said.

“We live in a world with so much data and information that it is becoming increasingly difficult to sift through them to separate signal from noise,” Rose said. . investment news.

The current rise of AI technology is a pivotal moment in the history of technology, moving content written in the 90s to CD-ROMs and uploading CD-ROMs to the Internet in the 2000s. similar to

“This is very much like that moment. It’s an opportunity for the industry and a game-changing technology,” Rose said. “How can we leverage technology in a responsible way to maximize its benefits and truly democratize it for investor success?”

Responsibility is important as AI becomes more mainstream and more aware of its limitations. He notes that technologies like ChatGPT frequently introduce factual errors into reports that make them sound convincing. So how can financial advisors trust information generated by services like Mo?

Mr. Rose conceded that Mr. Mo’s answer was not 100% correct. However, the company puts guardrails in place to make it more accurate than consumer AI programs. Like his AI at Morgan Stanley, Mo only gets Morningstar’s internal data, not the entire internet. Mo was also constrained to only answer financial questions.

“We made very clear choices about which partners to work with and how to implement systems that ensure data safety and privacy,” Rose said.

In addition to Morgan Stanley and Morningstar, Redtail CRMs from Riskalyze, FMG Suite, Hearsay Systems, and Orion have all deployed some form of AI capabilities for advisors.

Lending products are included in client portfolios because:



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